Performance Fibers closing N.C. yarn plant, plans investment

CHARLOTTE, N.C. (May 5, 2014) — To remain competitive in a challenging environment intensified by increased offshore competition, Performance Fibers Inc. plans to close one polyester tire yarn plant in North Carolina and transfer its production to a second plant in the state.

The transfer is part of "transformation" process the manufacturer of industrial and tire reinforcement fibers and fabrics is undergoing to address competitive issues. The process includes $25 million in investments to ,

Performance Fibers will close its Moncure facility in New Hill, N.C., over the coming 12 to 15 months and transfer production to a plant in Salisbury, N.C., “which has the capability and capacity to absorb all of the customer volume with surplus capacity and space to grow,” the company said.

The sites are about 110 miles apart.

“Providing local manufacturing and service to our customers is our key strategic advantage,” said Mark Wall, chief commercial officer. “Our customers value our unique position to produce in Asia, Europe and the Americas as a local supplier with global expertise. As the only remaining North American manufacturer of tire reinforcements and industrial products, we are committed to maintaining the strength of our North American presence.”

Performance Fibers CEO Wahid Tawfik noted that “over half of the tires purchased in the U.S. are coming from imports rather than domestic production. U.S. tire manufacturers are core customers to our North American production assets, and we are facing considerable and growing competitive pressure as a total supply chain.

“Performance Fibers faces a double impact with offshore competitors offering similar reinforcement products at lower prices imported into the North American market. These same market forces are also at play in Europe.”

To remain competitive in the face of this double impact, Performance Fibers said it will invest $25 million over the next 21 months to rationalize its footprint in North America, modernize equipment in North American and Europe, make step-change improvements in product quality and create “a product development center of excellence.”

“We believe that our associates in North American can compete effectively in a global marketplace, but they have been handicapped by low utilizations at multiple plant sites making cost efficiency difficult and investments all but impossible,” Mr. Tawfik said.

“Our goal in this transformation is to combine our key learnings from all of our global yarn operations with the best polymer and spinning platform and with state of the art winding capability into a single site in North America to ensure that PF is among the very best in the global terms of cost, quality and service.”

“Our decision to concentrate our yarn production into Salisbury gives us the ability to make our investment dollars and process changes much more powerful,” he added. “With these investments and other changes in place, Performance Fibers will be able to compete effectively with any producer anywhere in the world.”